Sales Week: A Case for Index-Strategy Diversification to Achieve Accumulation Goals

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Index annuities offer a variety of index strategies for good reason — not all perform consistently through varying market cycles.

For example

• A point-to-point cap strategy tends to perform well in a stable growth environment, while an averaging strategy tends to stand out more in a volatile environment.
• Strategies utilizing volatility-control indices offer more stable returns when stock-market indices are fluctuating. 

Relying on a single index strategy adds risk to achieving long term objectives. 

The graph below shows the annual performance rankings among the (1-year) index accounts offered with MarketValue Index Annuity during the 3 years ending 12/31/2021.

MarketValue Index

Index strategy annual performance rankings 1/1/2019 – 12/31/2021; Assumes cap and participation rates in effect 1/14/2022, and income rider not elected.

Conclusion

By diversifying premium among a variety of strategies, your clients may realize more consistent overall performance than going “all in” on a single strategy — and reduces the temptation to chase past results by reallocating.

Accumulation-Focused Index Annuities

• MarketForce Bonus Index – Rate Buy-Up!
• MarketMax Index – Rate Buy-Up!
• MarketSeven – 12-Year Index Ranking Flyer
• MarketValue – 12-Year Index Ranking Flyer

Important Considerations When Evaluating an Index Annuity
When seeking an accumulation-focused index annuity, consider the cap and participation rates available among all strategies offered. Index strategy performance is subject to market conditions throughout the year, not just the index change at the end of the contract year. Also consider the issuer’s commitment to strong renewal rates.

Learn More About Index Annuities from EquiTrust Life 

EquiTrust does not offer investment advice to any individual or agent and this material should not be construed as investment advice. Products underwritten and issued by EquiTrust Life Insurance Company, West Des Moines, Iowa. Products distributed by EquiTrust Insurance Marketing Services; in California doing business as EQT Insurance Marketing Services.